UNITED STATES
                             SECURITIES AND EXCHANGE
                                   COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

X    ANNUAL REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

            For the Fiscal Year Ended August 31, 2002

     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

            For the transition period from ______ to ______

                         COMMISSION FILE NUMBER: 0-18091

                               RSI HOLDINGS, INC.
                 (Name of small business issuer in its charter)

       North Carolina                                    56-1200363
(State or other jurisdiction of                      (I. R. S. Employer
incorporation or organization)                       Identification No.)

  28 East Court Street, Post Office Box 6847, Greenville, South Carolina 29606
               (Address of principal executive offices) (Zip Code)

Issuer's telephone number (864) 271-7171

Securities registered under Section 12(b) of the Exchange Act:

                                         (Name of each exchange on
         (Title of each class)               which registered)

                  None                              None

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, par value $.01

                                (Title of Class)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

          Yes [X] No [ ]

         Check if disclosure of delinquent  filers  in  response  to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         State issuer's revenues for its most recent fiscal year.

         The issuer's  revenues  from  operations  during  fiscal year 2002 were
$2,265,342.


         State the aggregate  market value of the voting and  non-voting  common
equity held by  non-affiliates  computed by  reference to the price at which the
common  equity  was sold,  or the  average  bid and asked  price of such  common
equity,  as of a specified  date within the past 60 days.  The aggregate  market
value of the voting  stock held by  non-affiliates  as of November  12, 2002 was
$95,356.

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date (November 12, 2002).

    Common Stock, par value     7,821,455 shares outstanding    $.01 per share

DOCUMENTS INCORPORATED BY REFERENCE:  Portions of the Company's definitive Proxy
Statement,  to be filed pursuant to Regulation 14A for the annual  shareholders'
meeting currently  scheduled to be held on January 30, 2003, are incorporated by
reference into Part III.

         Transitional Small Business Disclosure Format: Yes [ ] No [X]



<PAGE>

PART I.

Item 1. Description of Business

         RSI Holdings, Inc. (the "Company")  was  incorporated in North Carolina
in 1978.

         On January 18, 2002,  RSI Holdings,  Inc. (the  "Company"),  executed a
letter  of intent  to  acquire  substantially  all of the  assets of  Employment
Solutions,  LLC, a South Carolina limited liability  company.  On March 4, 2002,
the Company acquired  substantially  all of the assets of Employment  Solutions,
LLC,  a  South  Carolina  limited  liability  company  through  a  newly-formed,
wholly-owned   subsidiary,   Employment   Solutions,   Inc.,  a  South  Carolina
corporation ("Employment Solutions"). Employment Solutions is in the business of
locating and providing labor to industrial companies.

         Prior to January  31,  2000,  the  Company's  wholly-owned  subsidiary,
HomeAdd  Financial  Corporation,  engaged in the consumer  finance  business and
originated and sold consumer  finance  receivables,  substantially  all of which
were loans  secured by mortgages on improved  real estate.  Effective at January
31, 2000, the Company decided that HomeAdd should cease all business  activities
and  begin  the  orderly  liquidation  of  its  assets  and  settlement  of  its
liabilities.  The Company  completed the  liquidation of HomeAdd during December
2000.  During the period from January 1, 2001 through March 4, 2002, the Company
searched for and investigated business opportunities.

Services

         The Company operates through its  wholly-owned  subsidiary,  Employment
Solutions,  and provides manual labor to industrial businesses from its facility
in Greenwood,  South Carolina.  The Company makes  arrangements  with its client
companies  to provide the client  companies  with manual  labor.  The  Company's
client companies  request workers according to their needs and the Company fills
the  vacancies  from a pool of available  labor.  The client  companies  pay the
Company for the hours  worked at a  negotiated  rate per hour and the Company is
responsible for paying the workers for the hours worked plus the related payroll
taxes,  insurance  and other  payroll  costs.  The  workers  work at the  client
company's job site and under the direction of the client company's personnel.

Client customers

         The Company provides workers to industrial  businesses that need manual
labor.  Normally  experience or skill in a particular  industry is not required.
Revenues from each of the Company's three largest client companies  exceeded 10%
of net  revenues  during the fiscal year ended August 31,  2002.  Revenues  from
these three  client  companies  accounted  for a  substantial  amount of the net
revenues of the Company.

Billing practices

         The Company collects from its client companies and the workers are paid
each  week for  work  performed  during  the  previous  week.  Typically  at the
beginning of each week the Company  invoices its client  companies for the hours
worked  during the previous week and the client  companies  typically pay during
that same week.

Competition

         The manual labor sector of the staffing  industry is highly  fragmented
and highly competitive. The Company's competitors include a large number of sole
proprietorship, as well as regional and national organizations. Many of them are
large  corporations with substantially  greater resources than the Company.  The
Company primarily competes based on its reputation for trustworthiness, its

                                        1
<PAGE>

overall  business  experience and its connections to the labor market along with
responding  quickly to client requests allow it to compete in this sector of the
staffing industry.

Regulations

         The Company is required  to comply  with  applicable  state and federal
wage and hour laws.  These laws require payment of employees at minimum wage and
overtime rates.  The Company is also required to comply with laws regulating the
employer/employee  relationship,  such as tax  withholding  or reporting  social
security, antidiscrimination and workers' compensation. In addition, the Company
must comply with all  immigration  laws,  including the  Immigration  Reform and
Control Act.

         The  Company's  executive  offices are located at 28 East Court Street,
Greenville,  South Carolina,  29601. Its telephone number is (864) 271-7171.  At
August 31, 2002 the Company had a total of four (4) full time employees.

Critical Accounting Policy

           We  have  adopted  various  accounting   policies  which  govern  the
application of accounting  principles generally accepted in the United States of
America  in  the  preparation  of  our  financial  statements.  The  significant
accounting  policies  of the  company  are  described  in the  footnotes  to the
consolidated financial statements at August 31, 2002.

         Certain   accounting   policies  involve   significant   judgments  and
assumptions by management  which have a material impact on the carrying value of
certain assets and liabilities; management considers such accounting policies to
be  critical  accounting  policies.   The  judgments  and  assumptions  used  by
management  are based on  historical  experience  and other  factors,  which are
believed to be reasonable under the circumstances.  Because of the nature of the
judgments and assumptions  made by management,  actual results could differ from
these judgments and estimates which could have a material impact on the carrying
values of assets and liabilities and the results of operations of our company.

           We believe that the valuation  allowance  related to the deferred tax
asset is a  critical  accounting  policy  that  requires  the  most  significant
judgments  and  estimates  used in  preparation  of our  consolidated  financial
statements.  Refer to the discussion under Provision for Income Taxes section of
this  report  for a  detailed  description  of our  methodology  related  to the
recording of the valuation allowance for deferred taxes.

Environmental Matters

         The Company is subject to federal,  state and local  environmental laws
and regulations, however, due to the nature of the Company's current activities,
such  laws and  regulations  do not have a  direct,  substantial  impact  on the
Company's business operations.







                                        2
<PAGE>

Item 2. Description of Property

         The  Company  leases  approximately  3,000  square  feet of floor space
located at 28 East Court  Street,  Greenville,  South  Carolina  to serve as its
principal executive offices.  The Company believes that the property is adequate
and suitable for executive  office space.  The monthly rental expense is $2,550.
This lease includes office furniture and equipment.  The office space at 28 East
Court Street is leased from CTST, LLC. CTST, LLC is owned by three shareholders,
all being beneficial  owners of more than 5% of the outstanding  common stock of
the Company.  One of the shareholders is the President,  Chief Executive Officer
and a  director  of the  Company  and the other two  shareholders  are his adult
siblings,  one of whom is also a director of the Company.  The Company  believes
that this lease  contains  provisions  as  favorable  to the Company as could be
obtained from a third-party landlord.

         In April  2002,  Employment  Solutions  leased a  warehouse  and office
facility in Greenwood, South Carolina containing approximately 3,000 square feet
under a one year lease  arrangement  that requires rent of $1,200 per month plus
an additional common maintenance fee of $75 per month.  Employment Solutions has
the  option  to  continue  the  lease  for one  additional  year  under the same
arrangement  with the rent amount adjusted to reflect any change in the consumer
price index.

         The  Company's  has no plans to  invest  in real  estate,  real  estate
mortgages or persons  engaged  primarily in real estate  activities  nor does it
have any formal policy with respect to such investments.

         The Company  carries such  insurance as is  considered  reasonable  and
necessary  to cover its casualty and  liability  exposures.  The Lessor pays the
insurance on the facility described above.

Item 3. Legal Proceedings

         None.

Item 4. Submission of Matters to a Vote of Security Holders

         No matters were  submitted to a vote of securities  holders  during the
fourth quarter of the Company's 2002 fiscal year.









                                        3
<PAGE>

PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

         The  Company's  Common Stock is thinly  traded in the  over-the-counter
market by NASDAQ.  The high and low bid quotations of the Company's Common Stock
after giving effect to the 3:1 reverse stock split  effective  June 10, 2002 are
set forth  below for the fiscal  quarters  indicated,  as reported by NASDAQ for
such periods.  These  quotations  reflect  inter-dealer  prices,  without retail
mark-up,  mark-down or  commission,  and may not  necessarily  represent  actual
transactions.

                                      2002                       2001
       Fiscal                    High         Low          High           Low

       First Quarter              .03        .03          .21             .045

       Second Quarter             .06        .03          .045            .045

       Third Quarter              .33        .03          .06             .03

       Fourth Quarter             .41        .06          .03             .03

         As of October 27, 2002, the Company had  approximately 553 shareholders
of record.

         The Company  paid no cash  dividends  with  respect to its Common Stock
during fiscal 2002,  2001 and 2000, and does not intend to pay cash dividends in
the foreseeable future.

         The Company issued 2,222,222 shares of its common stock (6,666,666 on a
pre-split basis) on January 21, 2002 to Minor H. Mickel.  Minor H. Mickel is the
mother of the President and Chief Executive Officer of the Company.  This common
stock has not been registered under the Securities Act of 1933 and was issued in
exchange  for  convertible  debt in the  amount of  $500,000  at $.225 per share
($.075 per share on a pre-split  basis).  The convertible debt was issued by the
Company in exchange for cash advances made to the Company for working capital.

<TABLE>
<CAPTION>

                      EQUITY COMPENSATION PLAN INFORMATION

--------------------------------------------- ------------------------- ----------------------- --------------------
               Plan category                  Number of securities to      Weighted average          Number of
                                              be issued upon exercise     exercise price of         securities
                                              of outstanding options,    outstanding options,        remaining
                                                warrants and rights      warrants and rights       available for
                                                                                                  future issuance
--------------------------------------------- ------------------------- ----------------------- --------------------
                                                        (a)                      (b)                    (c)
--------------------------------------------- ------------------------- ----------------------- --------------------
<S>                                                          <C>                        <C>                  <C>
Equity compensation plans approved by                        1,609,439                  $.0993               43,333
security holders
--------------------------------------------- ------------------------- ----------------------- --------------------
Equity compensation plans not approved by                       70,000                  $.1900                    0
security holders
--------------------------------------------- ------------------------- ----------------------- --------------------
Total                                                        1,679,439                  $.1031               43,333
--------------------------------------------- ------------------------- ----------------------- --------------------
</TABLE>



                                        4
<PAGE>

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

General

         Special Cautionary Notice Regarding Forward-Looking Statements.

         This Report on Form 10-KSB contains  forward-looking  statements within
the meaning of Section 27A of the  Securities  Act and 21E of the Exchange  Act.
Forward-looking  statements  are indicated by such terms as "expects",  "plans",
"anticipates",  and words to similar effect. Such forward-looking statements are
subject to known and unknown  risks,  uncertainties  and other  factors that may
cause the actual  results,  performance  or  achievements  of the  Company to be
materially different from future results,  performance or achievements expressed
or implied by such  forward-looking  statements.  Important factors ("Cautionary
Statements") that could cause the actual results, performance or achievements of
the Company to differ  materially from the Company's  expectations are disclosed
in this Report on Form 10-KSB.  All written or oral  forward-looking  statements
attributable  to the Company are  expressly  qualified in their  entirety by the
Cautionary Statements.

Acquisition of business

         On March 4,  2002,  the  Company,  through  Employment  Solutions,  its
newly-formed,  wholly-owned subsidiary, acquired substantially all of the assets
of  Employment  Solutions,  LLC, a South  Carolina  limited  liability  company.
Employment  Solutions  is in the business of locating  and  providing  temporary
labor primarily to  manufacturing  concerns in the  Southeastern  United States.
Prior to the asset  purchase,  the Company had not conducted any business  since
January 31, 2000 other than seeking  acquisition  opportunities  and liquidating
the assets of its prior business.

Changes in basis of accounting

         As described in Note 1 to its Consolidated  Financial  Statements,  the
Company changed its basis of accounting for its financial  statements at January
31, 2000 from the going concern basis of accounting to the liquidation  basis of
accounting in accordance with accounting  principles  generally  accepted in the
United  States of America.  The  Company's  activities  during the eleven months
beginning February 1, 2000 consisted  primarily of selling the assets and paying
the liabilities of its prior business.  The Company completed the liquidation of
its prior business by December 31, 2000.

         On January 1, 2001, the Company changed its basis of accounting for its
financial  statements  from the  liquidation  basis of  accounting  to the going
concern  basis of  accounting  in accordance  with  accounting  principles  with
generally  accepted in the United States of America.  The  Company's  activities
since  January 1, 2001 through  February  28, 2002  consisted of looking for and
investigating business opportunities.

         The Company's financial statements as of and for the eight months ended
August  31,  2001 and the three and six  months  ended  February  28,  2002 were
prepared in accordance with disclosure  requirements applicable to a development
stage entity because the Company had no revenues  during the period from January
1, 2001 through February 28, 2002.

         Effective  with the purchase of Employment  Solutions on March 4, 2002,
the Company began operations which generated revenues.  As a result, the Company
ceased  to  report  under  the  standards  that  apply  to a  development  stage
enterprise.



                                        5
<PAGE>

Results of operations

         The Company had no revenues  during fiscal 2002 except those  generated
beginning on March 4, 2002 by Employment  Solutions.  Employment  Solutions is a
provider of temporary manual labor. Its customers are industrial businesses.  It
operates from an office facility in Greenwood,  SC. During the year ended August
31, 2002 the Company's revenues were $2,265,342.

         Employment Solutions incurred cost of services of $1,813,228 during the
year ended  August 31,  2002.  These costs  include  wages paid  directly to the
employees,  payroll  taxes,  workers  compensation  insurance  and  other  costs
directly associated with employment of the workers.

         General and administrative expenses were $538,595 during the year ended
August 31, 2002 as compared to $125,849 during the eight months ended August 31,
2001.  The expenses,  exclusive of Employment  Solutions,  during the year ended
August  31,  2002  include  salaries  and  related  costs  of  $216,723;  legal,
accounting,  and shareholder  related  expenses of $66,482;  rent of $29,100 and
other  administrative  expenses of $45,901.  The expenses  during the year ended
August 31, 2002 also include  selling and  administrative  expenses  incurred by
Employment  Solutions  during the year ended August 31, 2002 of $116,097 and the
amortization of customer related intangible assets of $64,292.

         Interest  expense  incurred  during the year ended  August 31, 2002 was
$105,483,  respectively  as compared to $28,726  during the eight  months  ended
August 31,  2001.  The  increase  in interest  expense  results  primarily  from
interest  incurred on  borrowings  relating  to the  acquisition  of  Employment
Solutions.  Interest  income  and  other  income in the  amount  of $3,471  were
primarily  from  earnings on cash  investments  during the year ended August 31,
2002.

Income taxes

         The consolidated financial statements have been prepared on the accrual
basis.  When  income and  expenses  are  recognized  in  different  periods  for
financial  reporting  purposes  than for  purposes  of  computing  income  taxes
currently  payable,  deferred  tax assets or  liabilities  are  provided on such
temporary differences.  The Company accounts for income taxes in accordance with
SFAS No. 109,  Accounting  for Income  Taxes.  Under SFAS No. 109,  deferred tax
assets and liabilities  are recognized for the expected future tax  consequences
of events that have been recognized in the consolidated  financial statements or
tax return.  Deferred tax assets and  liabilities are measured using the enacted
tax rates  expected  to apply to  taxable  income  in the  years in which  those
temporary differences are expected to be realized or settled.

         During  fiscal year 2002 and 2001,  net deferred tax benefits  were not
recorded relating to temporary differences since the Company is not assured that
the resulting additional deferred tax assets will be realized.

Liquidation stage operations

         The Company's activities during the eleven months beginning February 1,
2000  through  December 31, 2000  consisted  primarily of selling the assets and
paying the  liabilities of its prior  business.  The accruals and costs incurred
during this liquidation  period were recorded during the period ended August 31,
2000.

Leased Properties

         For a  description  of the Company's  arrangements  with respect to its
current lease obligations, reference is made to Part I, Item 2 - "Description of
Property," which is incorporated herein by reference.



                                        6
<PAGE>

Liquidity and Capital Resources

Anticipated Liquidity Requirements

         Certain of the Company's  shareholders  have  advanced  funds under the
debt arrangements discussed below under "Debt Arrangements". At August 31, 2002,
the Company's liabilities exceeded its assets by $184,421.

         The Company  anticipates  that its cash balances and cash  generated by
the  operations  of  Employment  Solutions  will be  sufficient to fund its cash
requirements during the next twelve months.

         Employment  Solutions  collects from its customers and pays the workers
each  week for  work  performed  during  the  previous  week.  Typically  at the
beginning of each week Employment Solutions invoices its customers for the hours
worked during the previous week and the customers typically pay during that same
week.  Although the customers have paid for services provided as described above
during the period  since  March 4, 2002,  the  Company is  dependent  upon a few
customers and can give no assurance that these customers will continue to pay in
a timely manner.

Cash and Cash Equivalents

         The Company had cash and cash  equivalents in the amount of $165,267 as
of August 31, 2002.  The Company  earned  $3,471 and $3,909 on its cash and cash
equivalents  during the year ended August 31, 2002 and eight months ended August
31, 2001, respectively.

Debt Arrangements

         On August 31,  2001,  Minor H.  Mickel,  the mother of Buck A.  Mickel,
President  and Chief  Executive  Officer  of the  Company,  loaned  the  Company
$250,000 under the terms of an unsecured note payable bearing interest at 8% per
year with the principal balance due on August 14, 2006.

         On February 14,  2002,  Minor H. Mickel  loaned the Company  $1,200,000
under the terms of an  unsecured  note payable  bearing  interest at 7% per year
with the principal  balance due on February 14, 2007. On February 25, 2002, Buck
A. Mickel and his two adult  siblings each loaned the Company  $20,000 under the
terms of  unsecured  notes  payable  bearing  interest  at 7% per year  with the
principal  balance due on February  25,  2007.  Total  proceeds of these  loans,
aggregating $1,260,000, were used in the purchase of Employment Solutions.

         On March 4, 2002,  the  Company  through its  wholly-owned  subsidiary,
Employment  Solutions,  incurred  long-term in the amount of $800,000 payable in
equal monthly  installments of $15,466 over five year at an interest at the rate
of 6% per year. The note is secured by the Company's  pledge of the common stock
of Employment Solutions.

Debt Converted into Common Stock

         On December 20, 2000, Minor H. Mickel loaned the Company $500,000 under
an 8%  convertible  note payable on December  20, 2005.  Under the terms of this
note all principal and interest was  convertible at the conversion rate of $.075
per share at the option of either the Company or holder of the convertible note.
Effective  January  21,  2002,  the  entire  principal  amount of  $500,000  was
converted into 6,666,666 shares of the Company's common stock.



                                        7
<PAGE>

Risk Factors

         The Company is dependent on a few customers in that the majority of its
revenues are from three customers.  The Company can give no assurance that these
customers will continue to need the services that it provides.

         The Company is continually  subject to the risk of new regulations that
could materially impact its business.

         The Company must continually attract reliable workers to fill positions
and may from time to time experience  shortages of available  temporary workers.
The Company can give no assurance  that its supply of labor will  continue to be
available.

         The Company is dependent upon the availability of workers  compensation
insurance.  It cannot be certain that such insurance will always be available or
will be available at an affordable price.


Item 7. Financial Statements

          The response to this Item is set forth on page F-2 and  submitted as a
separate section of this report.

Item 8. Changes  in  and  Disagreements  with  Accountants  on  Accounting   and
        Financial Disclosure

        None














                                        8

<PAGE>

PART III

Item 9.   Directors,  Executive   Officers,   Promoters   and  Control  Persons;
          Compliance with Section 16(a) of the Exchange Act

Item 10.  Executive Compensation

Item 11.  Security Ownership of Certain Beneficial Owners and Management

Item 12.  Certain Relationships and Related Transactions

         Information  required  under  Items  9,  10,  11 and 12 of Part  III is
incorporated  herein  by  reference  to the  portions  of the  definitive  Proxy
Statement to be filed with the Securities and Exchange Commission on or prior to
120 days following the end of the Company's fiscal year.














                                        9
<PAGE>
<TABLE>
<CAPTION>

Item 13. Exhibits, and Reports on Form 8-K

(a)           Listing of Exhibits

<S>           <C>
3.1           Articles of Incorporation of RSI Holdings, Inc., as amended: Incorporated by reference to Exhibit 3.2 and 3.2.2 to the
              Registration Statement on Form S-4 of RSI Corporation and Porter Brothers, Inc., File No. 33-30247 (the "Form S-4").

3.1.1         Articles of Amendment and Certificate of Reduction of Capital of Porter Brothers, Inc.: Incorporated by reference to
              Exhibit 4.1 to the Form 8-K of the Registrant filed with the Securities and Exchange Commission on November 28, 1989,
              File No. 0-7067.

3.2.1         By-laws of RSI Holdings, Inc., as amended: Incorporated by reference to Exhibit 3.1.1 to the Form S-4.

3.2.2         Amendments to By-laws: Incorporated by reference to Exhibit 3.2.2 to the Form 10-KSB of the Registrant filed with the
              Securities and Exchange Commission for the fiscal year ended August 31, 1996, File No. 0-18091.

4.1           See Exhibits 3.1, 3.1.1, 3.2.1 and 3.2.2.

4.1.1         Specimen of Certificate for RSI Holdings, Inc., common stock: Incorporated by reference to Exhibit 4.1.2 to the Form
              S-4.

*10.1         RSI  Holdings, Inc., Stock Option Plan, including an amendment: Incorporated  by reference to Exhibit 10.9 to the Form
              10-K of the Registrant filed with the Securities and Exchange Commission for the fiscal year ended August 31, 1990,
              File No. 0-18091 (the "1990 Form 10-K").

*10.1.1       Amendment No. 2 to Stock Option Plan: Incorporated by reference to Exhibit 10.9.1 to the Form 10-K of the Registrant
              filed with the Securities and Exchange Commission for the fiscal year ended August 31, 1992, as amended, File No.
              0-18091 (the "1992 Form 10-K").

*10.1.2       Amendment No. 3 to Stock Option Plan: Incorporated by reference to Exhibit 99.1 to the Company's Registration
              Statement on Form S-8 filed with the Securities and Exchange Commission on September 9, 1998 (Commission File No.
              333-63109).

*10.1.3       Amendment No. 4 to Stock Option Plan: Incorporated by reference to Exhibit 99.1 to the Company's Registration
              Statement on Form S-8 filed with the Securities and Exchange Commission on February 10, 1999 (Commission File No.
              333-72101).

*10.1.4       Amendment No. 5 to Stock Option Plan: Incorporated by reference to Exhibit A to the Company's Definitive Proxy
              Statement filed with the Securities and Exchange Commission on December 30, 1999 (Commission File No. 333-72101).

*10.2         RSI Holdings, Inc. Incentive Stock Award Plan, including an amendment: Incorporated by reference to Exhibit 10.8 to
              the 1990 Form 10-K.

*10.2.1       Amendment to Incentive Stock Award Plan: Incorporated by reference to Exhibit 10.8.1 to the 1992 Form 10-K.

*10.3         Stock Option Agreement by and between the Registrant and C. C. Guy dated as of April 22, 1998: Incorporated by
              reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange Commission for the year ended
              August 31, 1998, File No. 0-18091.


                                       10
<PAGE>

*10.4         Stock Option Agreement by and between the Registrant and Charles M. Bolt dated as of April 22, 1998:  Incorporated by
              reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange  Commission for the year ended
              August 31, 1998, File No. 0-18091.

*10.5         Stock Option Agreement by and between the Registrant and C. Thomas Wyche dated as of April 22, 1998: Incorporated by
              reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange Commission for the year ended
              August 31, 1998, File No. 0-18091.

*10.6         Stock Option Agreement by and between the Registrant and C. Thomas Wyche dated as of January 21, 1999.

*10.7         Stock Option Agreement by and between the Registrant and C. C. Guy dated as of January 21, 1999.

*10.8         Stock Option Agreement by and between the Registrant and Charles M. Bolt dated as of January 21, 1999.

*10.9         Stock Option Agreement by and between the Registrant and C. C. Guy dated as of August 18, 1999: Incorporated by
              reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange Commission for the year ended
              August 31, 1999, File No. 0-18091.

*10.10        Stock Option Agreement by and between the Registrant and Charles M. Bolt dated as of August 18, 1999: Incorporated by
              reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange  Commission for the year ended
              August 31, 1999, File No. 0-18091.

*10.11        Stock Option Agreement by and between the Registrant and C. Thomas Wyche dated as of August 18,  1999:  Incorporated
              by reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange Commission for the year
              ended August 31,1999, File No. 0-18091.

*10.12        RSI Holdings, Inc., 2002 Stock Option Plan.

*10.13        Stock Option Agreement by and between the Registrant and Charles C. Mickel dated as of June 10, 2002.

*10.14        Stock Option Agreement by and between the Registrant and C. C. Guy dated as of June 10, 2002.

*10.15        Stock Option Agreement by and between the Registrant and Charles M. Bolt dated as of June 10, 2002.

*10.16        Stock Option Agreement by and between the Registrant and Dorothy F. King dated as of June 10, 2002.

21.           Subsidiaries of the Registrant.

23.           Consent of Independent Certified Public Accountants.

99.1          Certificate Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Buck A. Mickel, dated November 25,
              2002.

99.2          Certificate Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Joe F. Ogburn, dated November 25,
              2002.
</TABLE>

* Management  contract or  compensatory  plan required to be filed as an exhibit
pursuant to Item 13 of Form 10-KSB.

         (b)      Reports on Form 8-K:

                  None.


                                       11
<PAGE>

Item 14.  Controls and procedures.


         Under the  supervision  and with the  participation  of our management,
including  the Chief  Executive  Officer and Chief  Financial  Officer,  we have
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls  and  procedures  within 90 days of the filing  date of this  quarterly
report,  and, based on their  evaluation,  our Chief Executive Officer and Chief
Financial  Officer  have  concluded  that  these  controls  and  procedures  are
effective.  There were no  significant  changes in our  internal  controls or in
other factors that could  significantly  affect these controls subsequent to the
date of their evaluation.

         Disclosure   controls  and   procedures  are  our  controls  and  other
procedures that are designed to ensure that information required to be disclosed
by us in the reports  that we file or submit under the Exchange Act is recorded,
processed,  summarized  and reported,  within the time periods  specified in the
Securities and Exchange  Commission's rules and forms.  Disclosure  controls and
procedures  include,  without  limitation,  controls and procedures  designed to
ensure that  information  required to be  disclosed by us in the reports that we
file or submit under the Exchange Act is  accumulated  and  communicated  to our
management,  including our Chief Executive Officer and Chief Financial  Officer,
as appropriate to allow timely decisions regarding required disclosure.













                                       12
<PAGE>

                                   SIGNATURES




In  accordance  with  Section 13 or 15 (d) of the Exchange  Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

<TABLE>
<CAPTION>
RSI HOLDINGS, INC.                                                     TITLE


<S>                             <C>                          <C>
/s/ Buck A. Mickel              November 25, 2002            President and Chief Executive Officer Buck A. Mickel
(Principal Executive Officer)       (Date)

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.



/s/ Buck A. Mickel              November 25, 2002             Director, President and
Buck A. Mickel                       (Date)                   Executive Officer
                                                              (Principal Executive Officer)

/s/ Charles C. Mickel           November 25, 2002             Director
Charles C. Mickel                    (Date)


/s/ C. C. Guy                   November 25, 2002             Director
C. C. Guy                            (Date)


/s/ Charles M. Bolt             November 25, 2002             Director
Charles M. Bolt                      (Date)



/s/ Joe F. Ogburn               November 25, 2002             Director, Vice President and
Joe F. Ogburn                        (Date)                   Treasurer (Principal Financial
                                                              and Accounting Officer)


</TABLE>



                                       13
<PAGE>


                                 CERTIFICATIONS


I, Buck A. Mickel,  the President and Chief  Executive  Officer of RSI Holdings,
Inc., certify that:

1.   I have reviewed this annual report on Form 10-KSB of RSI Holding, Inc.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   Designed  such  disclosure  controls  and  procedures  to ensure  that
          material   information   relating  to  the  registrant  including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;
     b)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date", and
     c)   Presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors:

     a)   All  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified  for the  registrant's  auditors any  material  weakness in
          internal controls; and
     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual report whether there were significant  changes in internal  controls
     or in other  factors  that could  significantly  affect  internal  controls
     subsequent  to the  date  of our  most  recent  evaluation,  including  any
     corrective  actions with regard to  significant  deficiencies  and material
     weaknesses.

Date: November 25, 2002                          /s/ Buck A. Mickel
                                                 -------------------------------
                                                 Buck A. Mickel, President and
                                                 Chief Executive Officer


<PAGE>

                                 CERTIFICATIONS

I, Joe F. Ogburn, the Vice President,  Treasurer and Principal Financial Officer
of RSI Holdings, Inc., certify that:

1.   I have reviewed this annual report on Form 10-KSB of RSI Holdings, Inc.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   Designed  such  disclosure  controls  and  procedures  to ensure  that
          material   information   relating  to  the  registrant  including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;
     b)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date", and
     c)   Presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.  The registrant's  other certifying  officers and I have disclosed,  based on
    our most  recent  evaluation,  to the  registrant's  auditors  and the audit
    committee of the registrant's board of directors:

     a.   All  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified  for the  registrant's  auditors any  material  weakness in
          internal controls; and
     b.   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.  The  registrant's  other  certifying  officers and I have  indicated in this
    annual report whether there were significant changes in internal controls or
    in  other  factors  that  could   significantly   affect  internal  controls
    subsequent  to the  date  of  our  most  recent  evaluation,  including  any
    corrective  actions  with regard to  significant  deficiencies  and material
    weaknesses.


Date: November 25, 2002                /s/ Joe F. Ogburn
                                      --------------------------------
                                      Joe F. Ogburn, Vice President,
                                      Treasurer, and Principal Financial Officer


<PAGE>







                          ANNUAL REPORT ON FORM 10-KSB

                   ITEM 7, ITEM 14(A)(1) AND (2), (C) AND (D)

                          LIST OF FINANCIAL STATEMENTS

                              FINANCIAL STATEMENTS

                           YEAR ENDED AUGUST 31, 2002

                               RSI HOLDINGS, INC.

                           GREENVILLE, SOUTH CAROLINA


























                                       F-1


<PAGE>

                               RSI HOLDINGS, INC.

                        FORM 10-KSB-ITEM 14(A)(1) AND (2)

                          INDEX OF FINANCIAL STATEMENTS


The  following  consolidated  financial  statements  of RSI  Holdings,  Inc. are
included in Item 7:


     Consolidated balance sheet - August 31, 2002

     Consolidated  statements of operations - For the year ended August 31, 2002
     and eight months ended August 31, 2001

     Consolidated  statements  of  shareholders'  deficit - For the years  ended
     August 31, 2002 and 2001

     Consolidated  statements of cash flows - For the year ended August 31, 2002
     and eight months ended August 31, 2001

     Consolidated  statement  of changes in net assets in  liquidation  - Period
     from September 1, 2000 through December 31, 2000

     Notes to consolidated financial statements - August 31, 2002

























                                       F-2


<PAGE>

                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors
RSI HOLDINGS, INC.
Greenville, South Carolina

         We  have  audited  the  balance  sheet  of  RSI   HOLDINGS,   INC.  AND
SUBSIDIARIES  as of August 31,  2002,  the  related  consolidated  statement  of
operations,  and cash  flows for the year ended  August  31,  2002 and the eight
months  ended  August  31,  2001.  We  have  audited  the  related  consolidated
statements of changes in net assets in liquidation of the Company for the period
from  September 1, 2000 to December  31, 2000.  We have also audited the related
statements of consolidated  shareholders' deficit for the years ended August 31,
2002 and 2001. These consolidated financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards  require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

         In our opinion,  the consolidated  financial  statements referred to in
the first paragraph present fairly, in all material  respects,  the consolidated
financial position of RSI HOLDINGS, INC. AND SUBSIDIARIES as of August 31, 2002,
and the related consolidated results of operations,  and cash flows for the year
ended August 31, 2002 and the eight  months  ended August 31, 2001,  the related
consolidated changes in net assets in liquidation for the periods from September
1, 2000 to  December  31,  2000,  and the  related  consolidated  statements  of
shareholders'  deficit  for the  years  ended  August  31,  2002  and  2001,  in
conformity with accounting principles generally accepted in the United States of
America.


                                            /s/ Elliott Davis, LLC

Elliott Davis, LLC
Greenville, South Carolina
October 31, 2002










                                       F-3


<PAGE>
<TABLE>
<CAPTION>

                                            RSI HOLDINGS, INC.
                                        CONSOLIDATED BALANCE SHEET
                                             AUGUST 31, 2002

                                                  ASSETS
CURRENT ASSETS
<S>                                                                                             <C>
     Cash                                                                                       $  165,267
     Accounts receivable                                                                           130,900
     Prepaid expenses and other                                                                     21,219
                                                                                                ----------
Total current assets                                                                               317,386

Property and equipment:
     Cost                                                                                           96,197
     Less accumulated depreciation                                                                  24,821
                                                                                                ----------
         Property and equipment - net                                                               71,376


Other assets:
     Customer related intangible assets, net of
         amortization of $64,292                                                                 1,864,478
                                                                                                ----------

                                                                                                $2,253,240
                                                                                                ==========

                                  LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
     Accounts payable                                                                           $   92,698
     Accrued expenses                                                                              104,626
     Current maturities of long-term debt                                                          145,739
                                                                                                ----------
         Total current liabilities                                                                 343,063

LONG-TERM DEBT                                                                                   2,094,598

Commitments and contingencies

SHAREHOLDERS' EQUITY:
     Common Stock, $.01 par value-authorized
         25,000,000 shares, issued and outstanding
         7,821,455 shares                                                                           78,214
     Additional paid-in capital                                                                  4,945,491
     Deficit                                                                                    (5,208,126)
                                                                                                ----------

     Total shareholders' deficit                                                                  (184,421)
                                                                                                ----------

                                                                                                $2,253,240
                                                                                                ==========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       F-4


<PAGE>
<TABLE>
<CAPTION>

                                            RSI HOLDINGS, INC.
                                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                   FOR THE YEAR ENDED AUGUSTS 31, 2002
                                  AND EIGHT MONTHS ENDED AUGUST 31, 2001


                                                                               For the           For the
                                                                                 Year          Eight Months
                                                                                Ended             Ended
                                                                              August 31         August 31
                                                                                 2002             2001
                                                                              ---------        ------------

<S>                                                                          <C>                <C>
REVENUES FROM SERVICES                                                       $ 2,265,342        $      -

COST OF SERVICES                                                               1,813,228               -
                                                                             -----------        ----------

GROSS PROFIT                                                                     452,114               -

EXPENSES:
     Selling, general and administrative                                         538,595           125,849
                                                                             -----------        ----------

Loss from operations                                                             (86,481)         (125,849)
OTHER INCOME (EXPENSE):
     Interest income and other                                                     3,471             3,909
     Interest expense                                                           (105,483)          (28,726)
                                                                             -----------       -----------

     Total other income (expense)                                               (102,012)          (24,817)
                                                                             -----------       -----------

NET LOSS                                                                     $  (188,493)      $  (150,666)
                                                                             ===========       ===========

NET LOSS PER SHARE - BASIC AND DILUTED                                       $      (.03)      $      (.03)
                                                                             ===========       ===========

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING*                                 6,950,983         5,581,095
                                                                             ===========       ===========






</TABLE>








*   The weighted average number of shares  outstanding  have been  retroactively
    adjusted for the three-to-one reverse stock split. See Note 5.


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       F-5
<PAGE>

<TABLE>
<CAPTION>
                                                RSI HOLDINGS, INC.
                                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
                             FOR THE YEARS ENDED AUGUST 31, 2002 AND AUGUST 31, 2001



                                                                 ADDITIONAL
                                            COMMON STOCK          PAID-IN
                                        SHARES        AMOUNT      CAPITAL       DEFICIT           TOTAL
                                        ------        ------     ----------     -------           -----


<S>                                     <C>          <C>         <C>            <C>           <C>
BALANCE, AUGUST 31, 2000                13,464,821   $134,648    $4,139,066     $(4,868,967)  $ (595,253)


     Conversion of debt to
         common stock                    3,333,333     33,333       216,667                      250,000
     Net loss                                                                      (150,666)    (150,666)
                                       -----------   --------    ----------     -----------   ----------

BALANCE, AUGUST 31, 2001                16,798,154    167,981     4,355,733      (5,019,633)    (495,919)

     Conversion of debt to
         common stock                    6,666,666     66,666       433,334                      500,000
     Three-to-one reverse
         stock split                   (15,643,365)  (156,433)      156,424                           (9)
     Net loss                                                                      (188,493)    (188,493)
                                       -----------   --------    ----------     -----------   ----------

BALANCE, AUGUST 31, 2002                 7,821,455   $ 78,214    $4,945,491     $(5,208,126)  $ (184,421)
                                       ===========   ========    ==========     ===========   ==========









</TABLE>















          The  accompanying  notes are an  integral  part of these  consolidated
financial statements.

                                       F-6
<PAGE>
<TABLE>
<CAPTION>

                                            RSI HOLDINGS, INC.
                                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    FOR THE YEAR ENDED AUGUST 31, 2002
                                  AND EIGHT MONTHS ENDED AUGUST 31, 2001

                                                                                    For the         For the
                                                                                      Year           Eight
                                                                                     Ended        Months Ended
                                                                                    August 31      August 31
                                                                                      2002            2001
                                                                                    ---------     -------------


OPERATING ACTIVITIES
<S>                                                                                <C>             <C>
     Net loss                                                                      $ (188,493)     $  (150,666)
     Adjustments to reconcile net loss to net
         cash (used for) operating activities
         Depreciation and amortization                                                 71,701            1,629
         Loss on disposal of property and equipment                                     1,266              998
         Changes in operating assets and liabilities
              Accounts receivable                                                     (54,177)               0
              Prepaid expenses and other                                              (18,131)            (573)
              Accounts payable, accrued expenses and other liabilities                 48,100            2,346
                                                                                   ----------      -----------
                  Net cash used for operating activities                             (139,734)        (146,266)
                                                                                   ----------      -----------

INVESTING ACTIVITIES
     Proceeds from sale of property and equipment                                       4,923              500
     Purchase of property and equipment                                               (36,659)               0
     Net cash paid for acquired business                                           (1,168,192)               0
                                                                                   ----------      -----------

              Net cash (used for) provided by investing activities                 (1,199,928)             500
                                                                                   ----------      -----------

FINANCING ACTIVITIES
     Proceeds from long-term notes payable                                          1,260,000          250,000
     Payment of long-term debt and other                                              (69,663)               0
                                                                                   ----------      -----------

         Net cash provided by financing activities                                  1,190,337          250,000
                                                                                   ----------      -----------

         Net increase (decrease) in cash                                             (149,325)         104,234

CASH, BEGINNING OF PERIOD                                                             314,592          210,358
                                                                                   ----------      -----------

CASH, END OF PERIOD                                                                $  165,267      $   314,592
                                                                                   ==========      ===========

SUPPLEMENTAL DISCLOSURE

     Cash paid for interest                                                        $   47,682      $     7,336
                                                                                   ==========      ===========

NON-CASH TRANSACTION

     Conversion of note payable to common stock                                    $  500,000      $   250,000
                                                                                   ==========      ===========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       F-7
<PAGE>
<TABLE>
<CAPTION>

                                                RSI HOLDINGS, INC.
                          CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
                              PERIOD FROM SEPTEMBER 1, 2000 THROUGH DECEMBER 31, 2000






<S>                                                                                         <C>
Shareholders' deficit at beginning of period                                                $ (595,253)

Activity that provided net assets:
     None                                                                                          -

Accruals and activities that used net assets:
     None                                                                                          -
                                                                                            ----------

         Total accruals and costs during period of liquidation                                     -
                                                                                            ----------


Deficiency in net assets in liquidation at end of period                                    $ (595,253)
                                                                                            ==========




</TABLE>


























The  accompanying  notes are an  integral  part of this  consolidated  financial
statement.

                                       F-8
<PAGE>


                               RSI HOLDINGS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES

NATURE OF BUSINESS

         On January 18, 2002,  RSI Holdings,  Inc. (the  "Company"),  executed a
letter  of intent  to  acquire  substantially  all of the  assets of  Employment
Solutions, LLC, a South Carolina limited liability company.

         On March 4, 2002,  the  Company  through a  newly-formed,  wholly-owned
subsidiary,   Employment   Solutions,   Inc.,  a  South   Carolina   corporation
("Employment Solutions"), acquired substantially all of the assets of Employment
Solutions,   LLC,  a  South  Carolina  limited  liability  company.   Employment
Solutions,  the only  business,  is in the  business of locating  and  providing
temporary labor primarily to manufacturing  companies in the Southeastern United
States. Most of Employment Solutions' employees are foreign nationals.  Prior to
the asset purchase, the Company had not conducted any business since January 31,
2000 other than seeking acquisition  opportunities and liquidating the assets of
its prior business.

         The Company  completed the liquidation of its prior business during the
eleven months from February 1, 2000 through December 31, 2000. During the period
from  January  1, 2001  through  March 4, 2002,  the  Company  searched  for and
investigated business opportunities.

BASIS OF PRESENTATION

         The accompanying  consolidated  financial statements at August 31, 2002
have been prepared in accordance with accounting  principles  generally accepted
in the United States of America that apply to established operating enterprises.
Refer to the discussion  below regarding the period from January 1, 2001 through
February  28,  2002 that were  reported  under those  standards  that apply to a
development  stage  enterprise  and the period  from  February  1, 2000  through
December 31, 2000 that was reported under the liquidation basis of accounting.

DEVELOPMENT STAGE.

         As of January 1, 2001, the Company had completed the liquidation of its
prior business and adopted the accounting  principles  generally accepted in the
United States of America that apply to established operating enterprises. During
the period from January 1, 2001 through  February 28, 2002, the Company  devoted
substantially  all its efforts to locating and establishing a new business,  but
had no  operating  business  or  revenues.  As a result,  on January 1, 2001 the
Company  began  reporting  under  those  accounting  principles  that  apply  to
development stage enterprises.  Accounting  principles generally accepted in the
United States of America that apply to established  operating enterprises govern
the  recognition  of revenue by a  development  stage  enterprise  and determine
whether a cost  incurred by a development  stage  enterprise is to be charged to
expense when incurred or is to be capitalized or deferred.

         Effective  with the purchase of  Employment  Solutions on March 4, 2002
the Company began operations which generated  revenues.  As a result the Company
ceased to  report  under  those  standards  that  apply to a  development  stage
enterprise.




                                       F-9
<PAGE>

LIQUIDATED OPERATIONS.

         As of January 31, 2000, the Company  adopted the  liquidation  basis of
accounting,  and after  liquidation of substantially all assets and liabilities,
it ceased  liquidation  basis  accounting and began reporting on a going concern
basis.

         As a  result  of the  decision  to  cease  all of  its  prior  business
operations,  the  Company  changed  its basis of  accounting  for its  financial
statements  as of January 31, 2000 from the going concern basis of accounting to
the liquidation  basis of accounting in accordance  with  accounting  principles
generally  accepted in the United States of America.  Consequently,  assets were
valued at estimated net realizable value and liabilities were presented at their
estimated  settlement amounts,  including costs associated with carrying out the
liquidation.  The Company  liquidated its prior business  operations  during the
period beginning February 1, 2000 through December 31, 2000.

PRINCIPLES OF CONSOLIDATION

       The consolidated financial statements include the accounts of the Company
and  its  subsidiaries  (all  of  which  are   wholly-owned).   All  significant
intercompany balances and transactions have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS

       Cash and cash equivalents consist of highly liquid investments, which are
readily  convertible  into cash and have  maturities  of three months or less at
date of  acquisition.  The Company  places  temporary  cash  investments in high
credit  quality  financial  institutions.  At times such  investments  may be in
excess of FDIC insurance limits.

PROPERTY AND EQUIPMENT

       Property and equipment  consists of office furniture and equipment and is
stated at cost. Depreciation is computed principally by the straight-line method
over the  estimated  useful life of the assets.  The life of the  furniture  and
office  equipment  when the asset is  acquired  is  estimated  to be five years.
Depreciation was not expensed during the liquidation period.

FAIR VALUE OF FINANCIAL INSTRUMENTS

       The  carrying  amounts  reported in the  balance  sheet for cash and cash
equivalents, accounts receivable, accounts payable and notes payable approximate
their fair values.

NET LOSS PER COMMON SHARE

       Basic net loss per common  share is computed on the basis of the weighted
average  number of common shares  outstanding  in accordance  with  Statement of
Financial  Accounting Standards (SFAS) No. 128, Earnings per Share. The treasury
stock  method is used to  compute  the effect of stock  options on the  weighted
average number of common shares  outstanding for the diluted  method.  Since the
Company  incurred a loss,  the effect of stock  options  on the  treasury  stock
method is anti-dilutive.

                                      F-10
<PAGE>

REVENUE RECOGNITION

       Revenues are  considered  earned and recorded  during the period in which
the service is provided.

INTANGIBLE ASSETS

       In accordance with SFAS No. 141, Business  Combinations,  the Company has
determined that the intangible portion of the purchase price is customer related
intangible assets and consists of customer list,  customer contracts and related
customer relationships,  and noncontractual customer relationships.  The Company
recorded amortization based on a fifteen year life.

INCOME TAXES

       The consolidated  financial  statements have been prepared on the accrual
basis.  When  income and  expenses  are  recognized  in  different  periods  for
financial  reporting  purposes  than for  purposes  of  computing  income  taxes
currently  payable,  deferred taxes are provided on such temporary  differences.
The  Company  accounts  for  income  taxes in  accordance  with  SFAS  No.  109,
Accounting  for  Income  Taxes.  Under  SFAS No.  109,  deferred  tax assets and
liabilities  are recognized for the expected  future tax  consequences of events
that  have been  recognized  in the  consolidated  financial  statements  or tax
return.  Deferred tax assets and  liabilities are measured using the enacted tax
rates expected to apply to taxable income in the years in which those  temporary
differences are expected to be realized or settled.

STOCK OPTIONS

       The Company  accounts for and will  continue to account for stock options
under  Accounting  Principles  Board Opinion 25,  Accounting for Stock Issued to
Employees. Applying SFAS No. 123, Accounting for Stock-Based Compensation, would
not materially affect net loss and loss per share for fiscal 2002 and 2001.

USE OF ESTIMATES

       The preparation of the financial  statements of the Company in accordance
with accounting  principles  generally  accepted in the United States of America
requires  management to make  estimates  and  assumptions  that affect  reported
amounts.  These  estimates are based on information  available as of the date of
the  financial  statements.  Therefore,  actual  results could differ from those
estimates.

NOTE 2 - PURCHASE TRANSACTION

         The Company effected the business combination with Employment Solutions
solely  through  the  distribution  of cash and by  incurring  liabilities.  The
transaction had no effect on equity or the outstanding  shares of the Company or
Employment Solutions.  For these reasons, the Company is considered the acquirer
in  this  business   combination.   In  accordance   with  SFAS  141,   Business
Combinations,  intangible assets of $1,928,770 have been recorded for the amount
of excess of cost over book value of the net assets acquired.

                                      F-11
<PAGE>

         The transaction also includes a provision that will be accounted for as
contingency  in the  purchase  transaction  based  on  the  future  earnings  of
Employment Solutions.  The provision provides for the payment of an annual bonus
of up to 20% of  earnings in excess of  $630,000.  The bonus is to be paid to an
executive  who has no  significant  ongoing  responsibilities  and is additional
consideration for the customer related  intangible assets. The amount to be paid
cannot be determined  beyond a reasonable  doubt and adjustments to the purchase
price will be made  annually.  At August 31,  2002 there are no amounts  payable
under this contingency.

         The allocation of the cost to acquire Employment Solutions is described
in the table below:

Cash payment to sole stockholder of Employment Solutions          $ 1,260,000
Note payable to sole stockholder of Employment Solutions              800,000
Cash received in insurance settlement                                 (36,657)
                                                                  -----------
         Total purchase price                                     $ 2,023,343
                                                                  ===========

         The leased  premises of Employment  Solutions were destroyed by fire on
April 2, 2002 and the Company received $36,657 in insurance  proceeds for assets
destroyed in the fire.

CALCULATION OF INTANGIBLE ASSET

         The following table  summarizes the estimated fair values of the assets
acquired  and  liabilities   assumed  at  the  date  of  acquisition   based  on
management's estimates.

                               ASSETS
Current Assets                                         $ 55,151
Unbilled labor                                           73,104
Prepaid rent                                              2,807
Property and equipment
     Furniture                                           30,815
     Vehicles                                            10,000
                                                       --------
         Total assets                                  $171,877

                             LIABILITIES
Legal fees                                               17,694
Accrued payroll                                          56,912
Accrued expenses                                          2,698
                                                       --------
         Total liabilities                               77,304
                                                       --------
                  Net assets acquired                  $ 94,573
                                                       ========

         Excess of book value over cost of net  assets  acquired  for the merger
         was  calculated as follow:

              Total cost                            $ 2,023,343
              Net assets  acquired                       94,573
                                                    -----------
              Total excess of book value over
                cost of net assets acquired
                March 4, 2002                       $ 1,928,770
         Less amortization during 2002                   64,292
                                                    -----------

         Net customer related intangible
                assets at August 31, 2002           $ 1,864,478
                                                    ===========

                                      F-12
<PAGE>

         In accordance with SFAS No. 141, Business Combinations, the Company has
determined that the intangible portion of the purchase price is customer related
intangible assets and consists of customer lists, customer contracts and related
customer relationships,  and noncontractual customer relationships.  The Company
recorded amortization based on a fifteen year life.

NOTE 3 - ACCRUED EXPENSES AND OTHER LIABILITIES

     Accrued expenses and other liabilities at August 31, 2002 are as follows:

         Payroll taxes                                  $     7,575
         Interest                                            57,801
         Legal and accounting                                23,700
         Other                                               15,550
                                                        -----------

                                                        $   104,626


NOTE 4 - LONG-TERM DEBT

<TABLE>
<S>                                                                                   <C>
Unsecured note payable to the mother of the President and Chief Executive
    Officer of the Company with interest payable quarterly at 8.0 percent per
    year.  The unpaid principal balance is due on August 14, 2006.                    $   250,000

Unsecured note payable to the mother of the President and Chief Executive
     Officer of the Company with interest payable annually at 7.0 percent
     per year.  The unpaid  principal balance is due on February 14, 2007.              1,200,000

Unsecured notes payable to the President and Chief Executive Officer of the
     Company and his two adult siblings in the amount of $20,000 each with
     interest payable annually at 7.0 percent per year. The unpaid principal
     balance is due on February 25, 2007.                                                  60,000

Note payable to Eadon Solutions,  LLC (formerly Employment Solutions, LLC) in
     monthly installments of $15,466 including interest at 6% per year through
     March 4, 2007 secured by the outstanding common stock of Employment
     Solutions, Inc.                                                                      730,337
                                                                                      -----------
                                                                                        2,240,337
                  Less current portion                                                    145,739
                                                                                      -----------

                                                                                      $ 2,094,598
                                                                                      ===========



</TABLE>







                                      F-13


<PAGE>

       The Company  incurred  interest cost as follows  during year ended August
31, 2002 and during the eight months ended August 31, 2001.

<TABLE>
<CAPTION>
                                                                                                 2002       2001
                                                                                                 ----       ----
<S>                                                                                         <C>          <C>
Interest incurred during years ended August 31
    Notes payable to the mother of the President and Chief Executive Officer                $  82,349    $  37,144
    Note payable to Eadon Solutions, LLC                                                       23,134            -
    Arrangements in connection with loan facilities with banks                                      -        7,783
                                                                                            ---------    ---------
                                                                                              105,483       44,927

    Less interest incurred during periods of liquidation                                            -       16,201
                                                                                            ---------    ---------

                                                                                            $ 105,483    $  28,726
                                                                                            =========    =========
</TABLE>

NOTE 5 - SHAREHOLDERS' EQUITY

REVERSE STOCK SPLIT

         On June 10, 2002, the Company's  shareholders  approved an amendment to
the Company's Articles of Incorporation to effect a 3:1 reverse stock split. The
Company  paid  cash  in lieu of any  fractional  shares.  The  total  number  of
authorized  shares of common  stock and the par value of the common stock remain
the same and were unaffected by the reverse split.

         All shares and per share  amounts have been  retroactively  restated in
connection with the reverse stock split.

CONVERSION OF DEBT TO COMMON STOCK

       The Company issued  2,222,222  shares of its common stock (6,666,666 on a
pre-split  basis) on January 21, 2002 and  1,111,111  shares of its common stock
(3,333,333  on a  pre-split  basis)  on  January  4,  2001 to the  mother of the
President and Chief Executive Officer of the Company in exchange for convertible
debt in the  principal  amount of $500,000  and  $250,000,  respectively  at the
conversion rate of $0.225 per share ($.075 on a pre-split basis).




















                                      F-14
<PAGE>


NOTE 6 - STOCK OPTION PLAN

         All  option  shares  and per  share  amounts  have  been  retroactively
restated in connection with the 3:1 reverse stock split effected during the 2002
year.

         During June 2002,  the Company  adopted the 2002 Stock Option Plan that
authorized the Board of Directors to grant options of up to 1,500,000  shares of
the Company's common stock.

         The Company's  previous  Stock Option Plan was adopted  during 1991 and
was amended on January 27,  2000,  January  21, 1999 and January 15,  1998.  The
previous Stock Option Plan as amended terminated on June 27, 2000 and no options
of the Company's  common stock can be granted  thereafter,  but this termination
does not affect the options previously  granted to the plan participants.  As of
August 31, 2002, 1,456,667 have been awarded to plan participants under the 2002
Stock Option Plan and 186,661 shares (net of 286,667 shares forfeited) have been
awarded to plan participants under the previous Stock Option Plan. These options
vest over a three year period.

         The Company  also has an informal  stock  option plan under which stock
options can be granted to certain  non-employee  officers and  directors.  Under
this plan  40,000  options  have  been  granted  during  the 2002 year and these
options  vest over a three year  period.  During the 2002  year,  6,667  options
expired and were  forfeited.  As of August 31, 2002,  options to purchase 70,000
shares have been granted and are outstanding.

         All options  under the plans were  granted at not less than fair market
value at dates of grant.  Stock option  transactions  during the two years ended
August 31 were as follows:

<TABLE>
<CAPTION>
                                                                                          2002             2001
                                                                                          ----             ----
<S>                                                                                     <C>              <C>
Options outstanding at September 1                                                      217,772          217,772
Options granted                                                                       1,496,667                -
Options exercised                                                                             -                -
Options forfeited                                                                       (35,000)               -
                                                                                      ---------        ---------
Options outstanding at August 31                                                      1,679,439          217,772
                                                                                      =========        =========
Options exercisable at August 31                                                        182,772          176,111
                                                                                      =========        =========
Outstanding options issued under Stock Option Plan at August 31                       1,609,439          181,111
                                                                                      =========        =========
Outstanding options issued under informal Stock Option Plan                              70,000           36,664
                                                                                      =========        =========

Options available for grant under Stock Option Plan at August 31                         43,333                0
                                                                                      =========        =========
Option price ranges per share:
   Granted                                                                        $0.07 - 0.077              -
   Exercised                                                                                -                -
   Forfeited                                                                      0.375 - 1.125              -
Weighted average option price per share:
   Granted                                                                                0.071              -
   Exercised                                                                                -                -
   Forfeited                                                                              0.518              -
   Outstanding at August 31                                                               0.102           $0.129
</TABLE>

         The  options  at  August  31,  2002 had a  weighted  average  remaining
contractual  life  of  approximately  8.3  years.  There  were  182,772  options
currently  exercisable  with option  prices  ranging from $0.15 to $1.125 with a
weighted average exercise price of $0.36.

                                      F-15
<PAGE>

NOTE 7 - INCOME TAXES

             During  fiscal years 2002 and 2001,  net deferred tax benefits were
not recorded relating to temporary  differences since the Company is not assured
that the resulting additional deferred tax assets will be realized.  Significant
components of the Company's deferred tax assets and liabilities are as follows:

<TABLE>
<S>                                                                                      <C>
    ASSETS
       Net operating loss carryforward                                                   $     4,754,000
       Other                                                                                       9,000
                                                                                         ---------------
                                                                                               4,763,000
       Valuation allowance                                                                     4,761,000
                                                                                         ---------------
       Deferred tax assets                                                                         2,000
    LIABILITIES
       Depreciation                                                                                2,000
                                                                                         ---------------
       Net deferred taxes                                                                $             -
                                                                                         ===============
</TABLE>

             At  August  31,   2002,   the  Company  has  net   operating   loss
carryforwards  available for income tax purposes of  approximately  $12,850,000.
Such carryforwards expire in 2006 through 2022. The Company's ability to use its
existing net  operating  loss  carryforward  may be  jeopardized  or lost if the
Company undergoes an "ownership change" as defined by the Internal Revenue Code.

             The valuation allowance  increased $69,000,  net during 2002 due to
the uncertainty of the Company's  ability to generate taxable income and realize
the benefits of deferred tax assets. The recognition of a net deferred tax asset
is dependent upon a "more likely than not" expectation of the realization of the
deferred  tax asset,  based  upon the  analysis  of the  available  evidence.  A
valuation allowance is required to sufficiently reduce the deferred tax asset to
the amount that is expected to be realized through future realization of profits
on a "more  likely  than not"  basis.  The  analysis  of  available  evidence is
performed on an ongoing  basis  utilizing the "more likely than not" criteria to
determine  the  amount,  if any,  of the  deferred  tax  asset  to be  realized.
Adjustments  to the valuation  allowance are made  accordingly.  There can be no
assurance that additional valuation allowances may not be recorded in the future
periods.

















                                      F-16
<PAGE>

NOTE 8 - SELLING, GENERAL AND ADMINISTRATIVE EXPENSES


       Selling,  general and administrative  expenses consisted of the following
for the year ended  August 31, 2002 and for the eight  months  ended  August 31,
2001:

<TABLE>
<CAPTION>
                                                                      2002             2001
                                                                      ----             ----
<S>                                                               <C>                <C>
         Salaries, wages and benefits                             $ 277,382          $ 68,864
         Legal and professional                                      38,745            13,928
         Rent                                                        36,775            15,200
         Telephone and utilities                                     25,451             8,322
         Office expense                                              23,168             8,199
         Travel expense                                              17,475               747
         Insurance                                                    7,042                 -
         Shareholder relations                                       27,737             4,562
         Depreciation                                                 7,409             1,629
         Amortization - intangible assets                            64,292                 -
         Other                                                       13,119             4,398
                                                                  ---------          --------

                                                                  $ 538,595          $125,849
                                                                  =========          ========
</TABLE>

NOTE 9 - MAJOR CUSTOMER INFORMATION

           Sales to three major  customers  exceeded 10% of net sales during the
fiscal year ended August 31, 2002. Sales to these customers accounted for 84% of
net sales.


NOTE 10 - AFFILIATED PARTY TRANSACTIONS

             The secretary of the Company until January 18, 2001 was a member of
a law firm that  represented  the Company.  Legal fees for services  rendered by
this firm to the Company amounted to approximately $30,000 during the year ended
August 31, 2002 (including  approximately $18,000 relating to the acquisition of
Employment  Solutions),  and $7,000  during the eight months  ended  January 31,
2001.  Legal fees for services  rendered by this firm to the Company  during the
liquidation  period  beginning  September  1, 2000  through  December  31,  2000
amounted to approximately $3,000.

    See Note 4  concerning  notes  payable  with  affiliated  parties and Note 5
concerning conversion of debt to common stock.

             The  Company  leases  its  principal   executive  offices  under  a
month-to-month  lease  arrangement  from a  corporation  that  is  owned  by the
President,  Chief  Executive  Officer  and a director of the Company and his two
adult  siblings.  Under the lease  arrangement,  the monthly rent was $1,500 per
month  during the first seven  months of the fiscal  year ended  August 31, 2002
when the rent was  increased  to $2,550  each month and  $1,500  during the year
ended  August 31,  2001.  Accounts  receivable  at August 31, 2002  included the
reimbursement  of  expenses in the amount of $1,381  that were  incurred  during
August 2002 by a company  that is owned by the  President  of the  Company,  his
mother and his two adult siblings.





                                      F-17
<PAGE>

NOTE 11 - RECENTLY ISSUED ACCOUNTING STANDARDS

         In June 2001, the Financial  Accounting  Standards  Board (FASB) issued
SFAS  No.  141-  Business  Combinations.  This  FASB  addresses  accounting  and
reporting for all business  combinations  and defines the purchase method as the
only   acceptable   method.   This  statement  is  effective  for  all  business
combinations initiated after June 30, 2001.

         In June  2001,  the FASB  issued  SFAS No.  142 -  Goodwill  and  Other
Intangible Assets.  This SFAS addresses how goodwill and other intangible assets
should be accounted  for at their  acquisition  (except for those  acquired in a
business  combination)  and after  they have been  initially  recognized  in the
financial statements.  The statement is effective for all fiscal years beginning
after  December 15, 2001. The impact of this SFAS had no effect on the Company's
financial statements.

         Additional  accounting  standards  that have been issued or proposed by
the FASB that do not require  adoption  until a future date are not  expected to
have a material impact on the consolidated financial statements upon adoption.

















































                                      F-18
<PAGE>

<TABLE>
<CAPTION>

                                INDEX OF EXHIBITS

<S>           <C>
3.1           Articles of Incorporation of RSI Holdings, Inc., as amended: Incorporated by reference to Exhibit 3.2 and 3.2.2 to the
              Registration Statement on Form S-4 of RSI Corporation and Porter Brothers, Inc., File No. 33-30247 (the "Form S-4").

3.1.1         Articles of Amendment and Certificate of Reduction of Capital of Porter Brothers, Inc.: Incorporated by reference to
              Exhibit 4.1 to the Form 8-K of the Registrant filed with the Securities and Exchange Commission on November 28, 1989,
              File No. 0-7067.

3.2.1         By-laws of RSI Holdings, Inc., as amended: Incorporated by reference to Exhibit 3.1.1 to the Form S-4.

3.2.2         Amendments to By-laws: Incorporated by reference to Exhibit 3.2.2 to the Form 10-KSB of the Registrant filed with the
              Securities and Exchange Commission for the fiscal year ended August 31, 1996, File No. 0-18091.

4.1           See Exhibits 3.1, 3.1.1, 3.2.1 and 3.2.2.

4.1.1         Specimen of Certificate for RSI Holdings, Inc., common stock: Incorporated by reference to Exhibit 4.1.2 to the Form
              S-4.

*10.1         RSI  Holdings, Inc., Stock Option Plan, including an amendment: Incorporated by reference to Exhibit 10.9 to the Form
              10-K of the Registrant filed with the Securities and Exchange Commission for the fiscal year ended August 31, 1990,
              File No. 0-18091 (the "1990 Form 10-K").

*10.1.1       Amendment No. 2 to Stock Option Plan: Incorporated by reference to Exhibit 10.9.1 to the Form 10-K of the Registrant
              filed with the Securities and Exchange Commission for the fiscal year ended August 31, 1992, as amended, File No.
              0-18091 (the "1992 Form 10-K").

*10.1.2       Amendment No. 3 to Stock Option Plan: Incorporated by reference to Exhibit 99.1 to the Company's Registration
              Statement on Form S-8 filed with the Securities and Exchange Commission on September 9, 1998 (Commission File No.
              333-63109).

*10.1.3       Amendment No. 4 to Stock Option Plan: Incorporated by reference to Exhibit 99.1 to the Company's Registration
              Statement on Form S-8 filed with the Securities and Exchange Commission on February 10, 1999 (Commission File No.
              333-72101).

10.1.4        Amendment No. 5 to Stock Option Plan: Incorporated by reference to Exhibit A to the Company's Definitive Proxy
              Statement filed with the Securities and Exchange Commission on December 30, 1999 (Commission File No. 333-72101).

*10.2         RSI Holdings, Inc. Incentive Stock Award Plan, including an amendment: Incorporated by reference to Exhibit 10.8 to
              the 1990 Form 10-K.

*10.2.1       Amendment to Incentive Stock Award Plan: Incorporated by reference to Exhibit 10.8.1 to the 1992 Form 10-K.

*10.3         Stock Option Agreement by and between the Registrant and C. C. Guy dated as of April 22, 1998: Incorporated by
              reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange Commission for the year ended
              August 31, 1998, File No. 0-18091.

*10.4         Stock Option Agreement by and between the Registrant and Charles M. Bolt dated as of April 22, 1998:  Incorporated by
              reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange Commission for the year ended
              August 31, 1998, File No. 0-18091.


<PAGE>

*10.5         Stock Option Agreement by and between the Registrant and C. Thomas Wyche dated as of April 22, 1998: Incorporated by
              reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange  Commission for the year ended
              August 31, 1998, File No. 0-18091.

*10.6         Stock Option Agreement by and between the Registrant and C. Thomas Wyche dated as of January 21, 1999.

*10.7         Stock Option Agreement by and between the Registrant and C. C. Guy dated as of January 21, 1999.

*10.8         Stock Option Agreement by and between the Registrant and Charles M. Bolt dated as of January 21, 1999.

*10.9         Stock Option Agreement by and between the Registrant and C. C. Guy dated as of August 18, 1999: Incorporated by
              reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange Commission for the year ended
              August 31, 1999, File No. 0-18091.

*10.10        Stock Option Agreement by and between the Registrant and Charles M. Bolt dated as of August 18, 1999: Incorporated by
              reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange  Commission for the year ended
              August 31, 1999, File No. 0-18091.

*10.11        Stock Option Agreement by and between the Registrant and C. Thomas Wyche dated as of August 18,  1999:  Incorporated
              by reference to the Form 10-KSB of the Registrant filed with the Securities and Exchange Commission for the year ended
              August 31, 1999, File No. 0-18091.

*10.12        RSI Holdings, Inc., 2002 Stock Option Plan.

*10.13        Stock Option Agreement by and between the Registrant and Charles C. Mickel dated as of June 10, 2002.

*10.14        Stock Option Agreement by and between the Registrant and C. C. Guy dated as of June 10, 2002.

*10.15        Stock Option Agreement by and between the Registrant and Charles M. Bolt dated as of June 10, 2002.

*10.16        Stock Option Agreement by and between the Registrant and Dorothy F. King dated as of June 10, 2002.

21.           Subsidiaries of the Registrant.

23.           Consent of Independent Certified Public Accountants.

99.1          Certificate Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Buck A. Mickel, dated November 25,
              2002.

99.2          Certificate Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Joe F. Ogburn, dated November 25,
              2002.
</TABLE>

* Management  contract or  compensatory  plan required to be filed as an exhibit
pursuant to Item 13 of Form 10-KSB.